Now is the time to buy. Now is also the time to buy to rent. That’s the word from real estate professionals as 2011 winds down – and they’re forecasting more of the same for the new year. Here’s a closer look at what’s on tap for 2012 through the eyes of Intown professionals in the know.
Even with no professional experience, you can’t go wrong investing in rental properties, says John Clark, president, Intown Consulting Group, LLC (intownconsultinggroup.com), a real estate investment advisement firm.
Clark’s company provides consulting services to first-time investors. “We’ll hold your hand in getting you the right rental house in the right area to make sure you’re successful.”
In the last year or so, he says Intown Consulting also has taken advantage of flipping, buying real estate and quickly reselling at a higher price. But he advises novices to steer clear of trying their hand at flipping. “It’s extremely risky and you really have to over-improve these houses and price them better than everybody else on the street.”
For those looking to buy and rent, he suggests buying “quality rental houses in good areas. Really do your homework. Maybe do one little pocket like Grant Park and breathe it, get in there; every street you should know. Study your rent values and study your values in the neighborhood.”
Clark says he’s looking forward to a bright 2012. “The sun’s coming out. I think people should get in the game.”
Specializing in high-end homes in both Intown and Buckhead, Atlanta Fine Homes Sotheby’s International Realty opens its first Intown office this month. Why now in the midst of a challenging marketplace?
“Over the past year, we have attracted some of the best agents in the Intown marketplace, and, accordingly, have been very well received by home buyers and sellers,” says David Boehmig, president and founder, Atlanta Fine Homes Sotheby’s International Realty (atlantafinehomes.com). “As the economy continues to improve, we feel that we will be very well positioned to help clients to buy or sell their next home.”
Boehmig says his office is seeing strong sales activity for homes at high-end price points and notes increased activity in communities such as Ansley Park, Morningside, Druid Hills and Decatur. For Buckhead and Ansley Park/Morningside in particular, he finds that “both markets have seen a nice bump in the average sales price of their homes. Also, the inventory of available homes has dropped, which will ultimately lead to stabilizing, and then rising home prices.”
He, too, sees buying — both as a future homeowner and an investor looking for rental properties – as a wise investment. “ ‘Smart money’ is now buying properties,” adds Boehmig. “In some cases, this applies to investors, but more and more it applies to individual homebuyers who, after four years of this real estate downturn, are ready to take advantage of the low interest rates and good supply.”
As an office that serves all Intown neighborhoods, along with Buckhead, the Intown Office of Coldwell Banker Residential Brokerage (coldwellbankeratlanta.com) is finding an increase in home sales in areas such as Virginia Highland and Morningside.
“According to data from Trendgraphix, there’s been a 24 percent increase in homes sold in the Virginia Highland area,” says Lisa Johnson, managing broker, Coldwell Banker Residential Brokerage, Intown Office, “and a 30 percent increase in homes sold in the Morningside area. This increase is based on the number of homes sold from January 2010 to August 2010 versus January 2011 to August 2011.”
The price range attracting the most interest in those areas: homes $600,000 and under, Johnson notes.
Additionally, the number of days on market for those particular areas, she says, has decreased, “with Trendgraphix data showing average days on market from January 2011 to August 2011 at approximately 105 days versus approximately 112 days for the same time period last year.”
More of the same is what Ken Covers expects for 2012. That’s more of what Covers is seeing right now in a market that he says “has really warmed up again. I am preparing myself for a similar, very strong year [in 2012],” says Covers.
Covers, a realtor with Fourteen West Realtors in Atlanta (14west.com), says spring was really hot for his office, which specializes in luxury home sales in Intown Atlanta, including communities such as Morningside and Virginia Highland.
“I had my best year last year with a little over $13 million. A few weeks ago, I was at $15 million already for the year.”
The Intown market is much stronger, he says, including for the areas of Ansley Park, Virginia Highland, Inman Park and Morningside.
A price point that saw increased activity this year is the $800,000 to $1 million range, Covers points out.
For “anything above $1.5 million, sales slow down. Those sales are not nearly as frequent as they used to be. It really comes down to the new normal that we now live in. [Homebuyers’] earnings are down and people are making very safe decisions, they’re very value conscious and the buyers have checked back their own expectations of what they need.”
Optimistic is the word for Susan Fessler and her team at Morris and Raper Real Estate Consultants (morrisandraperrec.com) in Atlanta. “Even with unemployment at consistently high levels, job concerns for those who are employed, a volatile stock market, and fears of continued price drops on the part of buyers, in addition to restrictive lending policies by banks,” says Fessler, “there are a number of strong reasons for capable buyers to jump into the market today.”
One reason she points out is the Federal Reserve’s decision to hold interest rates at the current level through 2012.
Fessler, who owns the office that handles both single-family homes and condominiums, is encouraged that home ownership will become more of a goal for those now up against rising rental rates, which she says “have dramatically escalated over the last year. Atlanta has been identified as an increasingly attractive market where owning a home beats the cost of renting. We believe we will see some of these tenants move into the ownership position as credit policies become more lenient.”
In Intown living, Fessler says while the average sales price for Intown condominiums has declined roughly 12.2 percent year to date over 2010, both her office and the Intown market as a whole have seen an increase in sales volume of at least 20.4 percent over last year. “No one knows where the bottom will be until we’re well on our way up. Buying now will give a buyer the chance to experience the appreciation that will follow with tighter inventory levels.”